Prime Minister Manasseh Sogavare says Solomon Islands can learn a lot from Botswana’s economic journey, formerly one of the world's poorest countries—with a GDP per capita of about US$70 per year in the late 1960s—it has since transformed itself into an upper-middle-income country, with one of the world's fastest-growing economies.
The Prime Minister made the remarks when he met with Her Excellency Dorcas Makgato, Non-Resident High Commissioner Designate of Botswana to Solomon Islands, yesterday.
But what can Solomon Islands learn from Botswana?
1. Botswana is the continent's oldest democracy. The Constitution of Botswana is the rule of law, which protects the citizens of Botswana and represents their rights. Botswana enjoys free and fair elections, political rallies and elections are often held with no civil unrest or social upheavals. The transition of power is often smooth and without incident.
2. Transparency International’s corruption perception index ranks Botswana as the least corrupt country in Africa, and ranks just below Portugal and South Korea.
3. Botswana's competitive banking system is one of Africa's most advanced. Generally adhering to global standards in the transparency of financial policies and banking supervision, the financial sector provides ample access to credit for entrepreneurs. The government also provides subsidized loans, increasing the participation of local entrepreneurs in the local economy.
4. Investment regulations are transparent, and bureaucratic procedures are streamlined and open. Investment returns such as profits and dividends, debt service, capital gains, returns on intellectual property, royalties, franchise's fees, and service fees can be repatriated without limits.
5. The government has maintained a sound fiscal policy, despite consecutive budget deficits in 2002 and 2003, and a negligible level of foreign debt.
6. It earned the highest sovereign credit rating in Africa and has stockpiled foreign exchange reserves (over $7 billion in 2005/2006) amounting to almost two and a half years of current imports.
So, in short, some of the more important lessons for the Solomon Islands is the importance of maintaining a politically stable government.
Addressing corruption is also important, allowing integrity institutions to not just flourish, but to also operate independently of the executive arm of government.
Fiscal responsibility is also important, and keeping in check the level of foreign debt, as this does have implications for the future growth of the country.
Creating a conducive environment for investors is also important, as well as giving local entrepreneurs access to finance, this is through the creation of a robust banking system, one that is well capitalized.